Unmitigated Disaster
You have to love Jim Rogers and the interviews he gives Bloomberg. He’s a wise man that comes across as a cranky at times but we should listen carefully to what he has to say.
“I don’t know where these guys get the audacity to take our money, taxpayer money, and buy stock in Fannie Mae,” Rogers, 65, said in an interview from Singapore. “So we’re going to bail out everybody else in the world. And it ruins the Federal Reserve’s balance sheet and it makes the dollar more vulnerable and it increases inflation.” [via Bloomberg]
Commenter and blogger Kevin H posted this reply to my $5 Trillion Dollars of Debt post yesterday, “How in the world is the U.S. going to bail Fannie and Freddie out of 5 trillion? We are already in debt 9.5 trillion dollars.”
Yes, the question is “how” and “can we?” Stay long Euros, Gold, and Oil for now.
July 15th, 2008 at 11:42 am
Personally I think he is a crack pot and part of the problem…
There are times to be a bear, and a bull. Not is not the time to be a bear…
What bugs me right now is that I missed the USO short by 64 cents! I ran a simulation a couple of weeks ago and it said USO would reach 120, break it and back off. Missed by 64 cents!!! That bugs me. The model then said the USO would drop off to 100…
We shall see… Though it bugs me that I missed it by 64 cents!!!! I could have made some EASY money right now…
July 15th, 2008 at 3:24 pm
Ah, I see FinancialArmageddon.com will once again get lots of curious touristas.
“There are some things you can count on in this world. When a politician says he is “not a crook,” you can expect the lawyers will soon come calling. When a policymaker says the “fundamentals are sound,” you can be sure that conditions are deteriorating rapidly. And when a regulator says “people should not worry,” like FDIC Chairman Sheila Bair did on a conference call following the the fifth U.S. bank failure this year, you know you should be taking a long and hard look at where you keep your money.” ~ http://online.wsj.com/article/SB121581435073947103.html
July 15th, 2008 at 8:12 pm
CG: He’s right on the money though. There are way more “Cheerleaders” for the US economy when he was one of the few loners that were decrying the mismanagement of the US economy. Now that he’s being proven right, he’s a crackpot? LOL.
July 16th, 2008 at 12:22 am
He is a crackpot because he has become part of the problem. He is a crackpot because his thinking has become his mantra.
Now with him being right on the money, sure, but when I look at my blog I have been right quite a bit as well. Though what I have learned is that sometimes you need to back off certain things that you say. You need to switch tack and think in other dimensions.
http://www.cnbc.com/id/23588079/
“No country in the world has ever succeeded by debasing its currency,” he said. “That’s what this man is trying to do. He’s trying to debase the currency as a way to revive America. It has never worked in the long term or the medium term.”
That is actually quite wrong. If you take a look at the various currencies throughout history countries do quite well with this. What you don’t want to do is collapse the currency. For example, Canada did well because it debased its currency. Though now it is a relatively strong currency.Though what scares the bezeers out of me with the Canadian currency is that the Canadian industrial base has collapsed. It is a pure commodities play and that is bad.
Then take a look at the UK, or Germany they used the currency to increase their exportability. Likewise with Japan they debase their currency to increase exports. Japan has a weak dollar policy plain flat and simple.
This is why this notion of a “strong” currency is not a good thing for America. As I have said many times in my blog a weak currency will be good for America’s industrial base and average Americans.
As much as it hurts my portfolio I actually don’t mind that the US currency is weak and has a 1 to 1 relationship with CDN, CHF, etc.
July 16th, 2008 at 6:07 am
CG:I think my response to you requires a separate post!
July 16th, 2008 at 1:56 pm
Hmmm… Still disagree with me that Jim Rogers is a crackpot that does not know how to shift gears?
I am not saying we are out of the woods, but with oil dropping, and the market going up we might have turned the corner!
July 16th, 2008 at 2:16 pm
CG: He maybe eccentric but I still disagree with you that he’s a crackpot. I seriously doubt that we have turned the corner, if that were true than the Euro would be @ 1.50 and dropping and Gold down below $900 and dropping fast.
July 16th, 2008 at 2:46 pm
The reason why I am thinking that we might have turned the corner is because the bear market was artificial. It was a shorters market as witnessed by the large number of big time shares on the SHO REG list.
The fact that the Euro is not at 1.50 goes back to an argument that I have said previously in that the reason why the USD is down is not entirely due to a weak USD. It is due to a diversification in the currencies. People I feel all too often think that there must be ONE, one currency one company one thing. I personally feel the reality is that the USD is a currency that will be part of a basket.
What has me wondering is why oil dropped yesterday. I am guessing insider information and wanting to get out before the crowd.
While we might not be out of the woods I wonder if we are about to witness a massive short covering rally. Remember the market has a massive amount of shorts on it. For example GRMN sky rocketed today, and it has about 5 days of short covering on it. This could get very interesting indeed….
BTW the reason why I feel Jim Rogers is a crack pot is because he sees things black and white and is so sure of himself. He does not question himself and that is a problem. I have quite a bit of respect for Boone Pickens. He is a man who has completely switched tack. Used to be oil man number 1, now is alternative energy man number 1!
Boone probably got out just at the peak is now putting that money to work with windmills and solar parks. And he will make a killing!
July 17th, 2008 at 2:17 pm
Looks like Jim Rogers has some egg on his face…
http://www.cnbc.com/id/25689691
Sure he long airlines and that is helping, but he is short financial and that is hurting! You know the fannies are up like 50%…
That’s why you have to get a feeling when the market turns and why I suspected we would have these vicious upticks since the market was massively shorted…
July 17th, 2008 at 3:41 pm
CG: While you might be right re: short covering, I seriously believe we’re not out any woods yet. This is just a relief rally and I expected the downward move to continue.
This is what I love about the markets, I’m on one side and you are on the other. That’s what makes a market!
July 17th, 2008 at 5:44 pm
It is not that we are on opposite sides. What bothers me with people like Jim Rogers is that they are spreading fear uncertainty and doubt (FUD!). That is what is causing the problems in the first place. Actually it is people like Jim Rogers who are partially responsible for this mess in the first place. He invested in commodities without adding value. Sorry but Jim Rogers has no use for commodities other than to make a profit. That is house flipping for me!
July 18th, 2008 at 4:24 am
FUD? I like that.